| Consider the following: |
| 1. In measuring the GDP, there should not be any difference by adopting different methods of measurement of GDP. |
| 2. The three methods (Income method, expenditure method and output approach) must yield the same results because the total expenditures on goods and services must by definition be equal to the value of goods and services produced (GNP) which must be equal to the total income paid to the factors which produced these goods and services. Which of these statements is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: C
Solution :
In theory all these measures should be the same. In the reality an item called statistical discrepancy must often be used to average out the errors.
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